Mr KELVIN THOMSON (Wills) (10:45): Yesterday the National Secretary of the Construction, Forestry, Mining and Energy Union, Michael O'Connor, put out a press release on behalf of his union urging the House to pass the Illegal Logging Prohibition Bill 2011 without delay. He said:

Workers, their families and their communities are holding on for grim life in the face of imports that unfairly undercut them. They expect urgent action from their representatives.

He went on to say:

The cost advantage that imported manufactured illegally logged wood products unfairly enjoy over manufactured products that utilise legal timber is conservatively estimated to be 20 per cent of the total cost of production.

Wood products represent the second largest sector in Australia's manufacturing industry and cheap, imported products are costing workers their jobs and killing their communities.

We had bipartisan support for taking action on preventing imports of illegally logged timber and imported wood products that utilise it. We have had three separate inquiries, each of which has recommended action.

Further delays are not acceptable and not feasible for timber processing and wood products manufacturing workers, their families and their communities. Their livelihoods are on the line.

That is very powerful stuff. But as well as support from the CFMEU, there are additional reasons for the House to pass this bill without further delay.

Australian timber imports of the order of $400 million a year come from illegally logged timber, and it has been estimated that Australia's share of the social and environmental costs of illegal logging amounts to $23 million a year. According to the Australian Conservation Foundation, about 22 per cent of the wooden furniture imported into Australia every year—more than one in every five pieces of wooden furniture—is believed to be made from illegal timber. Australia is the largest importer of processed timber from Papua New Guinea, where the World Bank estimates 70 per cent of the logging is illegally conducted. Indonesia is losing more than two million hectares of forest per year to logging and burning. In 2006 the Indonesian government lost more than US$2 billion from untaxed illegal logging, artificially low forest royalties and illegal transfer pricing.

A 2006 World Bank report estimated the financial losses to the global timber market at US$10 billion a year and the revenue losses to producer countries at US$5 billion a year. Another study estimated that trade in illegally produced logs reduced global timber prices by between seven and 16 per cent.

Modelling of the financial consequences of illegal logging for the study gave the following results. Producers of legal forest products in non-risk and high-cost countries, like the United States, Europe and New Zealand, are worse off by around US$15 billion a year due to reduced production, lower prices and lost trade opportunities caused by illegal logging. High-cost legal producers in risk countries, such as China, Indonesia, Russia and Malaysia, receive profits and income that are around US$31 billion lower than they would be without illegal logging.

Illegal logging causes the displacement of forest dependent communities from their livelihoods, cultural identity and spiritual values and the removal of important carbon sinks. Illegal logging undermines good governance and development efforts in several of Australia's closest neighbours, especially Indonesia and Papua New Guinea.

A 2010 Centre for International Economics report for the Department of Agriculture, Fisheries and Forestry estimated that the global trade in illegally logged timber products was $15 billion a year, with the social and environmental costs of such illegal logging being US$60 billion a year. Around 10 per cent of the sawn wood imports into Australia come from what are deemed to be high-risk nations, or nations where a large proportion of timber production is illegal—notably Indonesia, Malaysia and Papua New Guinea.

1 believe we need to ensure that Australian imports of forestry products are consistent with the goals of Australian aid programs and our stated commitments to reduce greenhouse gases. According to the Australia Institute report Rough trade: how Australia's trade policies contribute to illegal logging in the Pacific region, Australian aid includes programs and projects to help Indonesia, Papua New Guinea and the Pacific Island nations to better manage their forestry resources for long-term sustainability, for maximum socioeconomic benefit for their citizens and to participate in the REDD—reduced emissions from deforestation and forest destruction, the innovative program rewarding carbon sequestration.

Illegal logging in these countries is more extensive than generally understood and is a serious impediment to achieving the goals of Australian aid programs. Continued illegal logging demonstrates that governments cannot protect their forest resources and it undermines their credibility for participation in the REDD mechanism. Aid program managers and policymakers must be aware of the pitfalls in implementing REDD and programs must be coordinated with a clampdown on illegal logging, or they will not work.

According to TEAR Australia, an estimated 10 per cent of all imported wood in Australia has been illegally logged. Illegal logging in neighbouring countries like PNG and Indonesia is a criminal offence—for good reason. It wreaks environmental destruction and displaces indigenous peoples and animal species who live in the forests. Illegal logging flouts the law for profit, cheating already impoverished communities out of a fair price for their timber. This product of this lucrative trade of corruption and crime ends up in Australian households, which unknowingly buy this cheap imported wood. As Australian consumers, we do not want to be implicated in the destruction of someone else's home to build our own homes.

James Cook University rainforest ecologist Professor William Laurance has called for tighter laws to halt illegal timber imports, insisting on stricter labelling of timber products to track the country of origin.

Vague labels such as 'made in China' are not helpful to consumers, according to Professor Laurance, and are likely to be misleading, given China's dominant role in the global illegal timber trade. Although manufactured in China, the products could be made from timber harvested illegally in Africa, South America, Asia or Papua New Guinea. Less than five per cent of tropical timber is currently eco-certified as being obtained from a sustainably harvested source. According to Professor Laurance:

The current eco-labelling accreditation schemes are a long way from perfect, and need to be improved. Then you have countries like Indonesia and Malaysia that have developed their own accreditation schemes, but in several instances, these have been shown to be fairly lax.

Professor Laurance said that China had developed an immense export market for wood and paper products, driving large-scale clearing of tropical forests in Sumatra and Borneo. He said:

During a recent visit to Sumatra, I witnessed the felling of large expanses of native rainforests, which are being chopped up and fed into the world's largest wood-pulp plant, located nearby, and replaced by monocultures of exotic acacia trees.

He said that China had done 'little to combat the scourge of illegal logging' and is estimated to have imported between 16 million and 24 million cubic metres of illegal timber every year over the past decade. Professor Laurance said:

That is an incredible figure, twice the amount imported annually by leading industrial nations.

Professor Laurance has said that, while Chinese government agencies had commissioned an analysis of China's role in the illegal timber trade, there was no national plan or laws to prevent the import of illegal timber.

According to a report by Interpol and the World Bank, illegal or 'predatory' logging is estimated to defraud developing nations of about $15 million each year in tax and timber royalty evasions. Last year, Greenpeace exposed an illegal timber scandal in Sydney city, which originated in the Malaysian rainforests of Borneo. Greenpeace exposed the use of illegal timber on the development site, Central Park. The developers took action. Frasers Property Australia promised to audit and remove any illegally logged timber from the worksite. Even better, it committed to using only the FSC certified timber thereafter.

The fact that a company who wanted to do the right thing was using illegal timber highlights the need for the legislation that is before the House to introduce effective laws to stop illegal timber ending up in Australia. Greenpeace investigations in Australia, coupled with on-the-ground investigations by British organisation Earthsight, have revealed that illegal timber stolen from rainforests in poor communities is presently bought and sold across Australia by Australian companies.

The plywood found at the Central Park development in Sydney's CBD came from timber concessions in Sarawak, where systematic and widespread incidents of illegal logging have been documented. One of the world's largest and most notorious logging companies, Samling, was found to be logging protected species, encroaching on areas designated as national parks, destroying rivers and fraudulently tagging logs. According to a Greenpeace report:

Samling is the largest Malaysian logging company operating in the state of Sarawak, on the island of Borneo in Malaysia, where it is logging in an area two-thirds the size of Wales. Samling has a history of illegal logging and abuse of indigenous people's rights in Malaysia, Guyana, Cambodia and Papua New Guinea. In 2009, the Norwegian Government published a report documenting illegal logging by Samling and instructed its state-owned pension fund to divest its significant shareholdings.

The people of Bongu Village in Madang, Papua New Guinea, have been locked in a bitter fight to keep their timber in the ground. Their forests are being illegally felled by a timber contractor to be exported to another country. The people of Bongu Village have been watching their livelihoods disappear. They are seeing the opportunities for their children to go to school and for their families to make a better life for themselves simply being turned into cheap furniture for our homes, paper for our offices and coverings for our floors. We have been robbing one of our closest neighbours of their livelihoods simply to satisfy our demand for cheap timber.

Bongu Village is just one of thousands of communities devastated by illegal logging. This bill seeks to restrict the flow of illegal timber into Australia. In essence, this bill seeks to stop the theft of community resources like those which have been stolen from Bongu Village. This bill is Australia doing its duty as a responsible consumer of timber products. It is the right thing to do for Australia and it is the right thing to do for communities in our neighbouring countries.

I also believe we need to address the issue of palm oil plantations if we are genuinely committed to stopping the theft of resources from communities within our neighbouring countries. I support the campaign of Zoos Victoria and others on this matter. I want to read a quote from an article by Father Ed Meli, a Catholic priest from Divine Word University in Papua New Guinea. He said:

I see people's livelihood destroyed in terms of their life's sustenance. Huge parts of the virgin forest cleared used to be where people do their gardening, hunting, and collecting of different food stuff and materials for building their local traditional houses and homes.

Father Meli is describing watching hectares of virgin forest cleared to make way for oil palm plantations in Silovuti, Papua New Guinea.

Just like the people of Bongu Village watching their livelihoods being destroyed by illegal logging, the people of Silovuti are watching their livelihoods disappear to satisfy Australia's demand for cheap palm oil. Just as we should be responsible consumers of timber, we should also be responsible consumers of palm oil. Palm oil is found in almost half the products on our supermarket shelves, yet it is not labelled. Without the labelling of palm oil we have no idea if we are fuelling the kind of destruction happening right now in places like Silovuti.

Labelling will help us create a consumer driven market for certified sustainable palm oil—a form of palm oil that is produced in a more environmentally, socially and economically responsible way. I support the mandatory labelling of palm oil in Australia and for Australia be one of the nations in the world that focuses on importing certified sustainable palm oil.

I welcome this bill to the parliament. It honours the government's 2010 election commitment to combat illegal logging by restricting the importation and sale of illegally logged timber in Australia. The bill creates greater business certainty for Australia's domestic timber producers and suppliers, and provides an assurance to consumers that the products they purchase are legally sourced. The bill will put Australia at the forefront of global action to combat illegal logging and associated trade, which, as I have pointed out, is responsible for significant environmental, social and economic impacts.

The Illegal Logging Prohibition Bill 2011 will make it an offence to import timber and process domestic raw logs that have been illegally harvested.

The aim of the prohibition is to restrict timber that has been illegally harvested from entering the Australian market. It will provide consumers with confidence that the timber they buy, whether it is furniture or product off the shelf from the local hardware store, does not contain illegally logged timber.

The government recognises that these measures are an essential first step towards a longer term goal of Australia sourcing timber products from sustainably managed forests, wherever they are in the world. I congratulate the Labor government for implementing its election commitment to restrict the importation of illegally logged timber through this bill. This bill is an important piece of legislation, and somewhat historic—I understand that only the United States has a similar piece of law in force. I commend the bill to the House.